This week, the US will provide an update on both price growth and the labor market. According to economists, these will provide very important signals for the further interest rate path.
Chief economist Kyrre M. Knudsen at Sparebank 1 SR-Bank. Photo: Jan Inge Haga / SR-Bank Published:
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– This is the big inflation week this month. In sum, these figures can be decisive for Norges Bank’s interest rate path, says chief economist Kyrre M. Knudsen at Sparebank 1 SR-Bank.
There will be inflation figures from both the EU and not least the US on Thursday.
EU inflation affects the Norwegian interest rate path directly through imported inflation – we import a lot from the EU – and indirectly through possible movements in the interest rate market, explains Knudsen.
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Also when the US presents July inflation later in the day, it may affect interest rates with longer maturities and, not least, it will have an impact on what the head of the US central bank (Fed) decides at the next interest rate meeting in September.
– This has direct consequences for Norway, says the chief economist.
Important US key figures
Senior economist Sara Midtgaard at Handelsbanken says Friday’s “payrolls”, key statistics for the American labor market, will be essential.
She refers to Fed chief Jerome Powell last week referring to the labor market as “too tight” and inflation “too high”. It is now expected that unemployment will remain unchanged.
This is happening this week
Monday:
Retail July from SSB
The goods consumption index for July from Statistics Norway
Quarterly figures BW Offshore
Inflation figures for July in Sweden
Loan figures for the EurozoneTuesday:
JOLTS figures, Redbook retail trade and house prices from the US
Quarterly figures from Golden Ocean, Hurtigruten, Saga Pure, Northern Ocean and MåsøvalOndsdag:
Quarterly figures from Avance Gas, Everfuel, Norsk Solar, Bergen Carbon Solutions
Norgesgruppen’s half-year results
German inflation figures
Inflation figures for August in Spain
Weekly salmon export from SSB
ADP figures for private employment August in the USAThursday:
Quarterly figures from Adevinta, Nordic Nanovector and Norse Atlantic
Production index for building and construction activities July from Statistics Norway
French inflation figures
French GDP figures
Inflation figures for the Eurozone
PMI August and China
Retail July in Germany
Industrial production for July in Japan
Inflation figures and private consumption July in the USA
Inflation figures for August in the US Friday:
Unemployment figures for August from Nav
SAS’ third quarter figures
Employment August in the United States
ISM-tall august i USA
Construction investments July in the USAShow more
– It shows that the American labor market is quite resilient, despite higher interest rates. If the Fed sees no signs of cooling, then there may be a need for further hikes, says Midtgaard.
The key interest rate in the US is in the range of 5.25–5.0 per cent, the highest in 22 years, and the question is whether the interest rate peak has been reached or not.
Fresh wage statistics next Friday will also be able to help determine the answer.
– The monthly growth in hourly wages has been at fairly high levels in recent months. It is expected to drop slightly to 0.3 per cent, but in that case it will mean 3.6 per cent on an annual basis, which is far from compatible with the Fed’s inflation target of 2 per cent, says Midtgaard.
This week’s inflation and labor market figures will be important pieces in Powell’s monetary policy puzzle, sums up the senior economist.
Senior economist Sara Midtgaard at Handelsbanken. Photo: Adrian Nielsen
Surprised by people’s spending
Here at home, the week starts with Statistics Norway figures on turnover in the retail trade in July. The question is when we will really see people tighten up, according to Kyrre M. Knudsen, chief economist at Sparebank 1 SR-Bank.
– I am constantly surprised that people’s spending is holding up quite well, despite all the jumps in interest rates.
During the autumn, he expects that we will see tightening, especially in larger purchases.
Midtgaard says that Handelsbanken expects a drop of one per cent, but does not believe that this will prevent Norges Bank from raising interest rates in September as well.
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Expect weakening in the labor market
On Friday, the unemployment figures will come from Nav.
Knudsen says that “everyone is waiting for the labor market in Norway to weaken”. That it has not happened so far is really a paradox, says the chief economist.
The economic laws we know say that a slowdown in the economy normally also means increased unemployment. The fact that it has not happened now is connected to the fact that there has long been an unmet need for labour, according to Knudsen.
– The question is whether this will continue. The unemployment figures from Nav are of course an important figure when Norges Bank sets the interest rate path, but there is often a lag in these figures.
He says that the redundancy figures for Nav are a better indicator, but that they have not yet seen big results here either.
– I am particularly excited about construction. This is where we expect to see decline first, and we have seen small signs already.
2023-08-27 19:18:10
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